The current recession is much different from the recession of the 1980s and it mainly targets those businesses that have not kept up with the latest technological advances.
If you are a CEO, people look up to you for all solutions. Everything was rosy 10 years ago and you made a name for yourself, got a Knighthood for mediocre work, and you even started believing in your special extraordinary powers... :-)
Then the recession happened and everything became upside down and you do not know what to do. Let us just say that you feel like that person Sinnerman in Nina Simone's song, and you do not know where to run. Well, you can be thankful that we are not on a quart of wheat for a day's wages just yet. However, I do not believe that the third horseman of the apocalypse will be showing up soon, for some very good reasons.
This recession is going to hurt firms that have not kept up with the technological advances. In the last decade, we made some huge leaps in technology, but people did not realise this fact, because if you are a CEO at the top, it is easy to start believing in yourself thinking you know everything when you cannot even switch on a computer. Hence, it is easy to keep doing what you know best and hope things will get better, and that is where the best of the best trip up.
Very often, a new technology will be developing making it easier for people to do things in a different way and a better way. People will automatically start doing things in that way. Does your firm fall in that void?
Let us say that for example you have a Video & DVD hire shop. In the last 10 years, digital technology has developed to the point that you can view films on tap.
In the old days, the shop owner was the person who would position himself between the manufacturer and the client. He would buy in bulk, control the prices, choose what he wanted to sell, and made the most money. He was god. That has all changed with the emergence of online shops such as eBay and Amazon. Shoppers can now buy directly from the manufacturer eliminating the intermediary. Today, highly efficient long haul jet planes can carry cargo between cities and can operate on low profit margins... This allows the manufacturers to send their products directly to anyone anywhere in the world, at extremely reduced postage costs.
A Product for the Times
Are you trying to sell caviar to someone who prefers to eat fish and chips? When you are a CEO, you have a couple of millions in the bank, and suddenly everything looks cheap to you. You make a billion pound loss for your firm and they will not only pat you on your back but also give you a couple of millions as a bonus. It is easy to forget the average person on the street.
You need to put yourself on a minimum wage first and see what you can afford with that. That should give you a good idea of the products you ought to be developing at a time of recession.
A big difference with the recession of the 1980s is that majority of the homes did not have computers. Moreover, there was no Google. Today, world markets are able to trade trillions of pounds of goods over the Internet through Google. On the Internet, the world is a very small place because those tiny little electrons travel through the wires at the speed of light... Moreover, they decide where the money goes.
Peter has a Forecast Model
In my forecast, the third horseman is carrying a laptop, and he says "Behold, those that ignored technology shall be wiped away in the digital revolution."
The horse is metallic colour and made out of servos and microcontroller chips. :-)
If you have not bothered building an Internet presence, then your firm will be in a lot of trouble. You need your products seen to a worldwide audience, so how can you do that? The best option is to advertise through Google. They can advertise your products worldwide in an instant and reach billions of people. In addition, it saves you from having to have your own website and all the costs associated with that.
Therefore, your options are simple. You can either pray or hope that the third horseman does not show up, or advertise through Google and reach billions and even a trillion worldwide. How cool is that? You are the CEO so do the math captain...
The great thing about advertising on Google is that they can accommodate for every budget; you could be a small start-up or you could be a PLC.